Osaka Gas Co., Ltd.

Osaka Gas Co, Ltd. will participate in the Italian gas distribution business by undertaking a capital increase of Erogasmet S.p.A. (EG).

The Joint Venture, to be made through Osaka Gas UK, Ltd., an Osaka Gas subsidiary in UK, will be the company’s first gas distribution business outside Japan. It will be made as part of the international business of the company on the basis of the long-term management vision, “Field of Dreams 2020.” Osaka Gas intends to explore its experience earned through a century of domestic business in Japan.

EG is a gas distribution company with more than 50 years history, conducting the business in Northern Italy and Roma area for a total Delivery Points equal to 256 thousand.

The aim of the Joint Venture is to expand the current business by actively participating in next tender procedures and to play a leading role in the expected industry consolidation process.
In Italy, the gas industry has been gradually liberalized since the EU Gas Directive in 1998. Eventually, the gas business is legally obliged to be unbundled into import, transportation, distribution and sales sectors. The gas distribution sector, which manages pipelines and distributes gas (receiving tariffs for the usage of the pipelines), is regulated by limited-term concessions granted through tender processes.

Currently, to increase its efficiency, the Italian gas distribution business is being re-organized by the relevant authority. The concessions will be consolidated from municipality-based areas (no. of which is circa 6,500) to newly set wider areas (no. of which is circa 177). The concessions will be awarded by open tender processes.

Osaka Gas believes that the Joint Venture will be a major milestone in expand its business area in international energy market.

Additional Information
1. About Erogasmet S.p.A.

2. About Osaka Gas UK, Ltd.